Tánaiste plays down row over halt to EU funds for Fás

THE TÁNAISTE Mary Coughlan yesterday sought to play down a controversy with the European Commission that has brought a halt to the claiming of tens of millions of euro in European Social Fund payments.

Her department confirmed that a claim for €57 million spent by Fás on training and which was to be repaid by Europe, was withdrawn because of issues raised by European audits.

Other eligible Fás expenditure was used to replace the withdrawn claim, so that there was no overall loss to the exchequer.

Ireland has agreed not to request any further social fund payments until the issues raised by the audits are resolved. The cessation of the social fund payments was agreed between the Irish authorities and the commission in December.

The Labour Party’s spokesman on education, the former minister for labour Ruairí Quinn, has called for Fás to be “shut down” as a result of this latest blow to its credibility. He said some of its budget should be transferred to educational institutions such as institutes of technology.

This sparked an angry trade union reaction from Siptu and Ictu president Jack O’Connor who is also a long-time member of the Labour Party’s national executive.“Ruairí Quinn was undoubtedly the best minister for finance in my lifetime but he is totally and completely wrong in his call for closing down Fás,” Mr O’Connor said.

The Director of the European Commission in Ireland, Martin Territt, said problems with “missing paper” arose when an audit was carried out in November 2009. “Serious questions have been raised and we expect answers.”

EU funding of €211 million was allocated to Ireland for the period 2007 to 2013, while €407 million was allocated for 2000 to 2006.

The problems identified are connected with training courses contracted out by Fás to the private sector. Fás can claw back money from Europe for training courses it funds. If the problems with the audit trail cannot be answered, “then other questions arise, such as recovering the money,” Mr Territt said on RTÉ Radio.

Commission sources said when the results of the first audit covering the post-2007 period were discussed in Dublin last December, it was decided a second audit to cover spending between 2000 and 2006 should be conducted. This was carried out in March and led to the €57 million claim being withdrawn.

The commission wants the problems that have been identified to be settled when it meets with the Irish authorities at the end of this month.

The Irish Timeshas seen a copy of a special internal audit report produced by Fás and due to be reviewed by its board when it meets next week. The report looks at the extent to which Irish and European procurement guidelines were ignored when awarding contracts under the €120 million-plus Competency Development Programme whereby training was supplied to employed persons.

The report found inadequacies in relation to 18.4 per cent of one set of contracts, and 14.8 per cent in relation to another set of contracts. The report suggests that these contracts, which are from the 2005 to 2007 period, should be excluded from any claims for European Social Fund claims, because of procurement difficulties such as failures to tender.

One source said this level of failure, if extrapolated across the range of training services provided by Fás that qualify for European funding, would bring tens of millions of euro into question.

However, the press office for the Tánaiste and Minister for Education and Skills, Ms Coughlan, said no loss to the exchequer was expected.